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2016-02-09 Council Workshop minutes- Financial SummitCITY OF MENDOTA HEIGHTS DAKOTA COUNTY STATE OF MINNESOTA Minutes of the City Council Workshop — Financial Summit February 9, 2016 Pursuant to due call and notice, a workshop meeting of the Mendota Heights City Council was held at 1:10 p.m. at City Hall, 1101 Victoria Curve, Mendota Heights, Minnesota. CALL TO ORDER Mayor Krebsbach called the meeting to order at 1:10 p.m. Councilmembers present included Norton, Petschel, Povolny. Councilmember Duggan was absent. Staff present included City Administrator Mark McNeill, Assistant to the City Administrator Tamara Schutta, Planner Nolan Wall, Public Works Director John Mazzitello, Finance Director Kristen Schabacker, Recreation Program Coordinator Sloan Wallgren, Police Sergeant Eric Petersen, Fire Chief John Maczko, and City Clerk Lorri Smith. FINANCIAL MANAGEMENT PLAN City Administrator Mark McNeill introduced Stacie Kvilvang, Senior Municipal Advisor for Ehlers. Ms. Kvilvang presented a financial management plan prepared for the City, which explained a multi-year fiscal plan for the tax supported funds. The plan integrated the city's existing debt, capital improvement plans, future debt, tax base growth, and future operating expenses. It compared our city to the standards of the Government Finance Officers Association and other similar entities of our size. The findings of the plan were that the City is in good financial condition. The City has excellent reserves to address any issues that may come up. It has the ability to finance needed unforeseen projects if the Council chooses to do so. On a more limited basis, it also has Mendota Heights has an excellent bond rating of AAA, however current financial policies will need to be updated to maintain this rating. The importance of maintaining the General Fund reserves at the current level or at least at 75% of General Fund expenditures was discussed. It was noted that the City has a cash balance in the Water Tower and Water Revenue funds that can help to offset future facility needs. The existing utility surcharge, if kept, can offset a future tax increase needed to assist in paying for future equipment and facility improvements. By general consensus, the Council was in favor of keeping the water surcharge in place. It was noted that the City needs a plan to finance the actual costs of road reconstruction and rehabilitation. The City will need to increase taxes over the next several years to finance the required proj ects and the General Fund balance. It was noted that the bonding term should be shortened from the current 19 years. 15 years for street improvement projects. The Council will discuss an updated Financial Management Plan at an upcoming workshop meeting. ECONOMIC DEVELOPMENT Ms. Kvilvang, representing Ehlers, explained the basics of Tax Increment Financing and Tax Abatement to the Council and city staff. She explained the reasons for using these financing tools and the ways that they could be used for developing commercial areas or housing projects in the city. Ms. Kvilvang recommended the Council consider updating the existing Business Subsidy Policy to assist city staff when requests come in from developers. Administrator Mark McNeill explained how these types of iinancing tools could assist in the development of the Bourn Lane/TH 55 property. The Council considered the differences in property taxes for potential industrial, commercial, and residential developments at this site. FEES FEE SCHEDULE Administrator Mark McNeill reviewed with the Council suggested changes to the City's fee schedule. It was noted that a new fee for a TIF/abatement application is recommended to be added to the schedule for $1,000. Mayor Krebsbach suggested the fee be set at $1,200. The dog licensing fee is also proposed to be increased by $15.00 to help fund maintenance of the off-leash dog area. A demolition permit fee was proposed to be added for 1% of value or a minimum of $75. Various Planning fees were proposed to be updated. By general consensus, the City Council was in agreement with the proposed changes. These will be brought forward to the next Council meeting for action. CONDUIT DEBT FEES AND POLICIES City Administrator McNeill updated the Council on the importance of the city having a Conduit Debt policy in place and a fee associated with it. The City currently charges a$.08 per $1000 of par bond values, which is significantly below what other cities charge. A sample policy and a sl�minary of fees charged by other cities were reviewed by the Council. By general consensus, the Council directed staff bring forward a conduit debt policy to the City Council for consideration. UTILITY FRANCHISE FEES The City Council discussed the possibility of adding a utility franchise fee for electric and gas utilities. By general consensus, the Council did not want to pursue this fee at this time. OTHER SANTITARY SEWER FLOW / INFILTRATION Public Works Director John Mazzitello updated the Council on the possible implementation of a program to address sump pumps which are connected to the sanitary sewer. He stated the next February 9, 2016 Cottncil Workshop —Financial Sunamit Page 2 of 3 step would be for the City to adopt a policy and request proposals for a contractor to complete the inspections. He presented a sample policy from the City of Eagan, which addressed this issue in 2009-2010. By general consensus, the Council directed city staff to bring an ordinance forward for action to go forward with the inspections, and to prepare a Request for Proposals for contracting out the inspection work. Mayor Krebsbach left the meeting at 4:00 p.m. Acting Mayor Povolny took over the meeting. FISCAL DISPARITIES UPDATE It was noted that Mayor Krebsbach will be working with the City's legislators at the Capitol this spring to address this issue. CITY COUNCIL HEALTH INSURANCE PARTICIPATION Assistant to the Administrator Tamara Schutta presented the costs associated with the City Council participating in the City's health insurance for employees. By general consensus the Council was not interested in pursuing this at this time. City staff was directed to bring forward a survey of what other cities of similar size pay their Mayor and Councilmembers. I-\ ��L�l�l.��lu I �1�� I' There being no further business, Acting Mayor Povolny adjourned the meeting at 4:22 PM. a dra Krebsb ch Mayor TTES • . Lorri Smith City Clerk Februa�y 9, 2016 Council Workshop —Financial Suntmit Page 3 of 3